BUT IT’S STILL WAY UPHILL – Just asking: Which private equity mogul, not known for overheated rhetoric, is convinced the administration has an agenda not far short of socialist?

“WELCOME TO THE RECOVERY” – That’s the headline on a Geithner op-ed in today’s NYT: “[A] review of recent data on the American economy shows that we are on a path back to growth. The recession that began in late 2007 was extraordinarily severe, but the actions we took at its height to stimulate the economy helped arrest the freefall …

“[L]ast week’s data on economic growth show that large parts of the private sector continue to strengthen. Business investment and consumption — the two keys to private demand — are getting stronger … Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months. … We suffered a terrible blow, but we are coming back.” http://nyti.ms/9lpsn3

GEITHNER was a busy man in New York, apparently too busy to stop and chat with Fox Business’s Charlie Gasparino, via DealBreaker: http://bit.ly/dnI4iR

MORE ON THE FEEL-GOOD EFFORT – White House Senior Advisor Valerie Jarrett and National Economic Council Director Larry Summers wrote a letter of thanks to NFIB and the U.S. Chamber of Commerce for their support of the Small Business Jobs Bill. “We appreciate in particular the NFIB’s positive statements concerning the President’s lending fund that would support small and community banks that lend to small businesses.” Full letter: http://politi.co/cXoz6g

ICYMI – NYT’s Eric “Pittsburgh Flash” Dash had a cool read in Sunday’s Week in Review on the emerging field of econophysics. http://nyti.ms/bPSgny

TALKER: NO POLITICAL ADS FROM GOLDMAN – NYT’s Javier C. Hernandez reports: “Facing pressure from critics of Wall Street to limit its role in elections, Goldman Sachs has pledged not to spend any of its vast corporate reserves on political advertising. … The investment bank quietly revised its statement on political activities on its Web site last week … ‘Goldman Sachs also does not spend corporate funds directly on electioneering communications,’ the firm said in its statement. … The decision came after weeks of talks with the New York City public advocate, Bill de Blasio.” http://nyti.ms/9rRtfK

GOOD TUESDAY MORNING – The city of Bell, Calif., where city manager Robert Rizzo made nearly $800,000 last year (which is beyond insane), is reportedly refusing to turn over records to the L.A. Times and others that might explain how something like this could possibly happen. http://bit.ly/a8o8Ku

COMEDY VIDEO BLAST – Jon Stewart last night compiled a gag reel of the most idiotic “coverage” of Chelsea Clinton’s wedding, including a Fox correspondent saying she thought the wedding might be underway and, shortly thereafter, that it might be over. She also admitted she had no real idea of either way. Also classic: A CNN reporter identifying “what appears to be a delivery truck” (!) heading to the wedding site. You simply cannot—EVER—make this kind of stuff up. Via Gawker: http://bit.ly/93F1dG

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BREAKING – SEC PROBES BP TRADING: Reuters’ Rachelle Younglai and Svea Herbst-Bayliss report: “U.S. securities regulators are investigating whether people may have illegally profited from trading on nonpublic information at BP in the weeks and months following the disastrous Gulf of Mexico oil spill … The [SEC] is also investigating whether BP properly disclosed information on risks related to its deepwater oil operations in the Gulf of Mexico.” http://yhoo.it/ct2jhp

DRIVING THE DAY – Yesterday’s strong market rally, driving by the better than expected ISM manufacturing number, continued overnight as Asian stocks rose to three-month highs, boosted by good European bank earnings. Whether the rally continues today will depend in large part on monthly auto-sales reports, which will come out throughout the day. CNBC reports auto sales are expected to come in at an annualized 11.4 million, up from 11.1 million last month.

Personal income and consumer spending numbers out 8:30 a.m. All these figures are especially critical now as the campaign season heats up and the economy struggles for breakout speed. … Och-Ziff, one of few publicly traded hedge fund firms, reports second quarter earnings today.

TECH CANDY – The moment Morning Money has feared, the introduction of RIM’s new BlackBerry Operating System 6, comes today. Some reports have suggested RIM, eager to keep up on the media innovation front with iPhone and Android-based smartphones, will continue its move to an email environment similar to Google’s totally impossible to follow “conversation” format. Hopefully those reports will prove false and RIM will only enhance its media offerings and leave its best-in-class email functionality alone. http://bit.ly/8Z0Otb

TOUGH ROAD FOR DEMS ON TAXES – TNR’s Michael Kazin reports that it’s wrong to think Democrats own the political high-ground in the Bush tax cuts debate: “Democrats have struggled to convert the argument that the rich should pay a good deal more than the poor and the middle class into law. Polls … do occasionally show a general desire to raise rates on the wealthy. But at the same time, most Americans also consistently think the federal government wastes their money—even during the heyday of the Great Society in the mid-1960s—and consistently believe they pay too much. Time and again, the liberal argument for progressive taxation has lost out to the conservative cynicism about ‘big government.’” http://bit.ly/a6XX8R

GILLIBRAND HEARTS HAMPTONS – In this week’s New York magazine, Sen. Kirsten Gillibrand asked author/Wall Street insider Alexandra Lebenthal about her Hamptons plans: “Are you going to any parties? The funnest one is going to be Ron Perelman’s. That one’s going to have movie stars. It’s going to be the hit party, so make sure you know about that!” http://bit.ly/9OHqEr

BIGGEST SPILL BY FAR – NYT’s Campbell Brown and Clifford Krauss report on pg. A14 “The BP spill is by far the world’s largest accidental release of oil into marine waters, according to the most precise estimates yet of the well’s flow rate … Nearly five million barrels of oil have gushed from BP’s well since the Deepwater Horizon rig exploded on April 20 … That amount outstrips the estimated 3.3 million barrels spilled into the Bay of Campeche by the Mexican rig Ixtoc I in 1979” http://nyti.ms/c3yYeK

WILBUR ROSS WARNS ON ECONOMY – Billionaire investor and Geithner lunch partner Wilbur Ross appeared last night on PBS’ “Charlie Rose.” Ross warned that if America does not invest more in R&D spending as well as its energy, education, immigration and industrial policies, "within five or 10 years, we could be a second rate power." … Ross on Bush's tax cuts: "I'm resigned to the notion that Obama's going to tax people like me more heavily...I think that's okay, as long as they do something useful." Full transcript: http://politi.co/c1SDde Video: http://bit.ly/dpo4md

BERNANKE: LOCALS MUST BALANCE BOOKS – FT’s James Politi reports: “Ben Bernanke … warned of a ‘considerable way to go’ before the US economy made a full recovery… The focus of Mr Bernanke’s remarks was the dire fiscal conditions among US state and local governments, which he said were ‘weighing on economic activity’ as these entities cut back on spending and employment. And the Fed chairman warned that tough choices lay ahead for local politicians. ‘With economic conditions still far from normal, state budgets will probably remain under substantial pressure for a while, leaving governors and legislatures a difficult juggling act as they try to maintain essential services while meeting their budgetary obligations.’” http://bit.ly/bqLCiJ

FED TO CONSIDER POLICY CHANGE – WSJ’s Jon Hilsenrath reports on pg. A1: “Federal Reserve officials will consider a modest but symbolically important change in the management of their massive securities portfolio when they meet next week … The issue: Whether to use cash the Fed receives when its mortgage-bond holdings mature to buy new mortgage or Treasury bonds, instead of allowing its portfolio to shrink gradually … Any change—only four months after the Fed ended its massive bond-buying program—would signal deepening concern about the economic outlook. If the Fed's forecast deteriorates significantly, it could also be a precursor to bigger efforts to pump money into the economy.” http://bit.ly/bCmL7g

MORGAN STANLEY TO SPIN-OFF FRONTPOINT – CNBC’s John Carney reports: “Morgan Stanley plans to spin off FrontPoint Partners, the Greenwich, Conn. hedge fund it bought in 2006 … Morgan Stanley has been weighing the future of its stakes in several hedge funds following the passage of the financial reform bill restricting bank ownership of such funds. … The fund has been interviewing candidates for top positions following the spinoff, one person said. It has also informed certain employees that they may need to seek employment outside the fund following the spinoff, according to another employee. The spinoff is expected to take place within the next three months.” http://bit.ly/9x7JBh

HARMAN BUYS NEWSWEEK – POLITICO’s Mike Allen and Keach Hagey report: “The Washington Post Co. has sold Newsweek to Sidney Harman, a wealthy industrialist and husband of Rep. Jane Harman (D-Calif.), and Jon Meacham will not remain as the magazine’s editor …
‘In seeking a buyer for Newsweek, we wanted someone who feels as strongly as we do about the importance of quality journalism,’ said Donald E. Graham, chairman and chief executive officer of The Washington Post Company.” http://bit.ly/9OZnIU

WHY NOT WARREN? – Fortune’s Katie Benner reports: “Whether Elizabeth Warren heads the nascent [CFPB] has become the first pitched battle in how the recently passed financial reform laws are put into practice. If the episode so far is any indicator, the battle between interests and reformers is far from over. Detractors say that Warren lacks experience, that she's not impartial … But these knocks against Warren obscure the likely impact that she would have on the bureau. And mostly, they are straw men.” http://bit.ly/c4xogY

ZELIKOW TO JPMORGAN – FT’s Francesco Guerrera reports: “JPMorgan Chase will on Tuesday announce it has hired a former Clinton administration Treasury official to spearhead a new drive to win more commercial banking business from governments in Asia, Africa and Latin America. The recruitment of Daniel Zelikow, who served under Robert Rubin and is close to Tim Geithner … is part of JPMorgan’s efforts to boost its overseas revenues by taking on international rivals such as Citigroup and HSBC.” http://bit.ly/c7qZuC

GEITHNER PLEDGES GSE REFORM – WSJ’s Randall Smith reports on the NYU speech: “Mr. Geithner promised coordination among more than a half dozen federal agencies charged with implementing the changes, eliciting laughs from his audience … as he listed each agency by name. And he promised ‘dramatic reform’ of government housing agencies Fannie Mae and Freddie Mac, which he said had helped fuel excesses that led to the housing-market meltdown … Among attendees for the speech were Thomas Russo, general counsel of [AIG] … and Rodgin Cohen, a top Wall Street lawyer at the firm of Sullivan & Cromwell LLP.” http://bit.ly/9Y2bn

TRAVELING SALESMAN – WP’s Brady Dennis reports on pg. A10: “Timothy F. Geithner, traveling salesman, swept through Manhattan on Monday making a pitch to skeptical bankers, business leaders and even the mayor. His central message: Far-reaching financial regulations … aren't something to fear. Rather, they are the foundation of a stronger economy for the months and years ahead. … During his visit Monday, Geithner assumed the role of peacemaker, trying to thaw the chilly relationship that has developed between the Obama administration and the business community. He assured industry officials that the new rules … would create stability while leaving room for businesses to prosper and grow.” http://bit.ly/99Z6i7

ALSO DRIVING THE CONVERSATION:

U.S. HITS UAE OVER BBERRY BLOCKAGE – FT’s Andrew England and Daniel Dombey report: “The US … raised the stakes over the United Arab Emirates’ decision to suspend BlackBerry services, when it labelled the move a ‘dangerous precedent’ for democracy and freedom of speech. But local officials and analysts insist the dispute … is a question of legal compliance and bolstering the country’s efforts to maintain security and fight crime. In Washington, a state department spokesman said the Obama administration was ‘disappointed’ at the UAE decision.” http://bit.ly/cp1t4K

FEDS PROBE MORTGAGE DEALS – WSJ’s Carrick Mollenkamp and Serena Ng report on pg. A1: “Federal probes of the collapsed mortgage-bond boom are shedding light on how Wall Street firms sometimes created securities and sold them to one set of investors, while advising others to bet against them. One firm that was a major player in mortgage securities, Deutsche Bank AG, illustrates a pattern investigators are looking at. While creating and selling mortgage securities to some of its clients, the big German bank was not only advising other clients to bet the other way, but also sometimes doing so itself. … Deutsche's actions are a vivid example of potential conflicts on Wall Street—the way big financial firms play both sides of the fence with investors.” http://bit.ly/cTeNYQ

RUNNING OUT OF BENEFITS AND HOPE – NYT’s Michael Luo reports on pg. A1: “Facing eviction from her Tennessee apartment after several months of unpaid rent, Alexandra Jarrin packed up whatever she could fit into her two-door coupe recently and drove out of town. … Ms. Jarrin is part of a hard-luck group of jobless Americans whose members have taken to calling themselves ‘99ers,’ because they have exhausted the maximum 99 weeks of unemployment insurance benefits that they can claim. For them, the resolution recently of the lengthy Senate impasse over extending jobless benefits was no balm. The measure renewed two federal programs that extended jobless benefits in this recession beyond the traditional 26 weeks to anywhere from 60 to 99 weeks, depending on the state’s unemployment rate. But many jobless have now exceeded those limits. They are adjusting to a new, harsh reality with no income. In June, with long-term unemployment at record levels, about 1.4 million people were out of work for 99 weeks or more, according to the Bureau of Labor Statistics.” http://nyti.ms/csec9x

** A message from GE Capital: GE Capital provides critical financing to thousands of small and medium sized businesses across the U.S., helping support jobs and local economies.